Thursday, 20 December 2012

Maruti Suzuki, India's leading Passenger car maker is now looking to foray into the Light commercial vehicles market and will target Tata Motors which has more than 50% share in the market. The company though has Omni, which was one of the earliest built vehicles and is used as a cargo vehicles however due to the lack of Diesel engine, the sales have not picked up as expected.

The project is codenamed 'AP' and if the exercise fructifies into an actual investment, the possible entry into light commercial vehicle ( LCV) space could happen "between 2015 and 2017", according to informed sources. The company is likely to develop an all-new platform or may use the Suzuki carry pick up truck platform which is sold in South East Asia and may tweak it to handle the overloading abuse in the country.

According to Frost & Sullivan, the Indian small and light commercial vehicle segment is likely to grow by a compounded annual growth rate of 18% over the next five years to 8,30,000 units by 2016. With the development of infrastructure, the country is expected to shift to hub-and-spoke model of transporting goods. In the hub-andspoke model heavy trucks ply on big highways, or hubs, and small commercial vehicles act as spokes in cities where the movement of heavy vehicles is restricted.

Deepesh Rathore, MD of IHS Automotive, says the technological entry barrier are limited in the mini truck space and the segment is one of the fastest growing segments in the Indian automotive industry with further potential to grow large volumes.

"Despite the entry of many players in small truck space, Tata Motors continue to enjoy over 50% of the market share and the others too are growing, that clearly shows that there is a room for more players. Maruti Suzuki can certainly be a strong challenger to Tata Motors with the widest possible reach, but having a suitable diesel engine is the key," said Rathore.